Is your company's employee wellness program right for you?

A growing number of employers nationwide are offering employee wellness programs, with many linking financial incentives to employee participation and health outcomes.

But with increased popularity comes many questions: Are workplace wellness programs effective or an invasion of employee privacy? Does offering people financial incentives lead to lasting changes that foster physical well-being? Are wellness programs truly voluntary if employees face financial penalties for not participating?

"We have lots more to learn about what constitutes the best evidenced-based workplace wellness programs," says Laurie Whitsel, director of policy research for the American Heart Association. "It's important for companies to offer comprehensive wellness programs and a culture of health in the workplace that supports employee health and well-being."

Creating a Healthy Workforce

Corporate wellness programs can help employers manage health care costs and improve productivity by creating a healthier workforce. Employees can gain access to tools and resources to improve their health and reduce their risk of developing chronic conditions.

Fifty-six percent of large employers with wellness programs offer employees financial incentives, and 23 percent link these incentives to health outcomes, according to a 2014 national survey of employer-based health plans by the benefits consultant Mercer.

Employers are also expanding their corporate wellness programs, spending an average of $693 per employee on incentives in 2015, up from $595 in 2014 and $430 five years ago, according to a survey by Fidelity Investments and the National Business Group on Health, a nonprofit based in the District of Columbia.

The survey found that more employers are using incentives – cash, gift cards, reduced health care premiums or a contribution to a health care account – to encourage employees to participate in biometric screenings, health risk assessments and physical activity programs. Fewer employers are using employee disincentives for not participating. Yet less than half of employees earned their full incentive amount in 2014.

Voluntary or Coercive

Recently, the debate over whether or not it's coercive to provide financial incentives to employees who take part in health screenings has intensified.

The Affordable Care Act allows employer-based plans to incorporate wellness incentives that can total up to 30 percent of the cost of coverage and up to 50 percent if the goal is to stop smoking. Companies can gather health data from employees as part of a voluntary wellness program, but the Americans with Disabilities Act prohibits discrimination against workers based on health status.

This spring, the Equal Employment Opportunity Commission issued proposed rules that would classify wellness programs as voluntary as long as the employer rewards or penalizes an employee no more than 30 percent of the cost of coverage. Some employers say the proposal restricts their ability to offer rewards and doesn't resolve conflicts between the two laws. Consumer advocates worry the proposal strips workers of crucial protections against health and disability-related discrimination.

"The EEOC [proposed] rules are good news for employers and employees. They offer clarity and acknowledge that incentives play a role in fostering engagement," says LuAnn Heinen, vice president at National Business Group on Health, which represents large employers' perspectives on health policy issues.

But other experts see potential problems. They believe programs that link financial consequences – such as higher health insurance premiums or out-of-pocket expenses – to employee participation and health outcomes can backfire.

"Some say [penalties] are good because it forces people to be healthy. But that's not what the evidence says. These programs can prevent people from accessing the services they need, and that can have a detrimental effect on their health," says Claire McAndrew, private insurance program director at Families USA, a consumer advocacy organization in the District of Columbia.

JoAnn Volk, a senior research fellow at Georgetown University's Center on Health Insurance Reforms, has a similar mindset. "There continues to be no evidence that putting money on the line makes it more likely that people are going to have long-term changes in their health behaviors and improve health outcomes," she says.

"Good workplace wellness programs make it easy for employees to participate and provide support and activities that are based in evidence. You can't just charge someone a higher premium if they don't quit smoking or get their body mass index down and call it a wellness program," McAndrew says.

For example, benefits offered in employer-based health insurance plans should support corporate wellness programs. If a company wants employees to stop smoking, then its health insurance plans should cover evidence-based smoking cessation programs.

"Privacy is a foremost concern. Employees want assurances their health data will be protected," Whitsel says. "Sometimes these privacy notices are written in a lot of legalese that employees don't bother to read."

Beyond Traditional Wellness Programs

Experts expect the design of corporate wellness programs will continue evolving as health care reform unfolds. Jeff Ruby, chief executive officer of NEWtopia – a personalized health company with offices in New York and Toronto – believes more companies will shift from offering one-size-fits-all wellness programs to individualized disease prevention programs for employees at risk for chronic conditions. NEWtopia is a voluntary program that takes a "holistic approach" by considering an individual's genetics, personality and willingness to change.

Employers are also looking beyond traditional corporate wellness programs and making environmental and policy changes that foster a healthier workplace, Heinen says. She sees employers beginning to embrace a broader view that focuses on well-being, which includes physical, emotional and even financial wellness.

More employees today enjoy healthier cafeteria choices, smoke-free zones, unlocked stairwells so they can skip the elevator, screen savers that remind them to take a break, mindfulness training and much more.

"Well-being is the new wellness," Heinen says. "It's not just about joining a particular program. Instead, employers are creating better environments to support employee health."